Benchmark West Texas Intermediate crude, which sets the price of much of the oil produced in the US, fell 59 cents to $106.12 per barrel in New York. Brent crude fell 56 cents to $125.66 per barrel in London.

The Energy Information Administration's weekly report noted that energy demand remains weak in the US Oil demand dropped 5.4 percent, while wholesale gasoline demand fell 7.2 percent when compared with a year ago.

Gasoline supplies fell 1.4 million barrels last week, according to the EIA.

Earlier in the day, the International Energy Agency said that global oil supplies fell by 200,000 barrels per day in February, even as members of the Organization of Petroleum Exporting Countries increased production.

Government energy experts predict that global supplies will continue to fall later this year. Tighter supplies could push oil and gasoline prices higher.

US energy officials have called on major oil producers to address the supply shortage, and Saudi Arabia's top oil official said OPEC will produce more, if needed.

"Saudi Arabia and others remain poised to make good any shortfalls — perceived or real — in crude oil supply," Saudi Oil Minister Ali Al-Naimi said at a major oil conference in Kuwait.

In Kuwait City, the head of the International Energy Forum said he believes there is no supply shortage.

"There is enough oil in the market," said IEF Secretary-General Aldo Flores-Quiroga. "It is well supplied."

The IEF is a group based in Riyadh, that includes major oil producers such as Saudi Arabia and Russia as well as the large consuming nations of the IEA and other nations.

In other energy trading, heating oil was virtually unchanged at $3.27 per gallon, as were gasoline futures at $3.35 per gallon. Natural gas futures rose by 1 cents to $2.29 per 1,000 cubic feet.